Bitcoin Forum

I guess you all are aware of the 330BTC story > https://bitcointalk.org/index.php?topic=5106313.0

which now has been resolved after an extended period of time.

the player deposited 129 BTC , no questions were asked.

afterwards, the player won 201BTC and had a total of 330BTC that were held by cloudbet for account ownership issues.
 

without going into much details, my concern is this ;

what if the player lost his 129 BTC ? i guess we all know that oblivious answer, no questions would have been asked.

now assuming the player was from a country that cloudbet does not allow, or any other reason, shouldn't they return the initial deposit immediately and keep the winnings for later time ?

 
TL;DR ; when you deposit a huge amount of bitcoin, no questions asked, no KYC b.s, but when you win, clouldbet plays the KYC card, do you guys think this is ethical ? should cloudbet get away with such actions?

If I'm not wrong it works in the same on the normal fiat websites.

You can open one account and deposit 10k and lose everything in 1 minute but if you win you cant withdraw your winnings.

I think KYC verification should be done at the time of deposit and not at the time of withdrawal. That eliminates the whole situation of confiscating the balance. It only make them seems like they are plotting something from others point of view if they are asking for KYC at the time of withdrawal.

Still I don't consider this as untrustworthy but doubt their ethics. They have right to check if someone is breaking TOS or not but like I said above KYC process should be initiated prior to accepting deposit from a gambler.

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I appreciate that you raised the topic for community discussion and I think it has been raised by others as well in scam accusation but never took any initiative to start a discussion.

Ofcourse it's unethical, if they will do that I think they should have done that in the first place. I don't see the logic on why you have to do a KYC first before you can claim your winnings.

This is some kind of blocking the user's rights on getting his money back with a big amount of profit. And yes, for some reason it may turn out to be scam if they didn't pass the KYC because of the lack of requirements.

just because other websites do it, it does not mean it's right. the wrong doings of others never justifies one own's mistakes. am i wrong?


exactly, if they care so much, then they shouldn't accept a large deposit and hope for the player to either lose it or fail to comply with their requirements.

they do have their own TOS which i am pretty certain that it doesn't state the exact point of when KYC card could be played, but they use this forum to advertise their website, and we as a community are the once that keeping the forum alive for them, why not have our own terms, if the community thinks this is unethical, and since we can't enforce any rules on Cloubet outside of the forum ,then  cloudbet should at least be  tagged for such unethical behavior.

until they make it crystal clear for the players that while depositing they need to go through  KYC not only after they win - i personally think this is more or less a legit-scam-behavior.

It's a known strategy since most people lose all their funds.Asking KYC in the beginning would lower the profit significantly.
My personal concern here is that at the amount of 1xx B they should have asked for KYC before allowing to bet.
There are known bet mafias who have their dogs to place bets on bought games.
Wouldn't be surprised if they would use BTC casinos since there is no KYC and monitoring of these kind of abuse.

I agree that online casinos should ask for KYC when making deposits above a certain amount (similar to withdraw limits on exchanges). This whole thing could easily prevented by asking for KYC upfront.

Lovely  and agree with it :)



I think I will go down with neutral for the moment to highlight the issues and wait for what Cloudbet has say to this solution. They also should be given a chance to speak and prove something that we might be missing here. Also I would wait for others as well to speak into this matter.

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Come to think about my earlier post here, here is just a little modification to my suggestion included in that post. I think large deposits should be accepted but prior to that they should go through KYC process as already said but for small deposits I think some casinos might think kinda waste of energy or feel lazy about it so they can come up with limitations for unverified accounts (like deposit/withdraw limitation, bet limitation).

Best example- I guess Bittrex/Poloniex implemented this kind of thing.

I think owner can decide what rules they can implement on their site so its our duty to read the terms and conditions before signing in to any sites but most people skip this part just like always skip button.But I didn't know the answer why a renowned site made action like these,I think their sites reputation is more worthy than $330BTC

This is the problem of the lack of regulations for this market. And as these casinos, exchange and wallets, do not have physical office and with  phones number for the case of have a big problem be possible to solve these problems more directly, the situation only worsens.

It is very complicated solve a problem only here in the forum... And we do not forget it:

- the owners of the casinos, exchange and wallets are anonymous, but these same anonymous owners require that their clients deliver true documents? How absurd is that?

I'm not saying this is right or wrong but if we have huge websites regulated from different governments like PokerStars doing the same thing why do you expect a different thing from them?

Second that.
Few case I have seen same issue regarding KYC lately. It's look like a policy to freeze customer fund. Why need fucking KYC especially during withdrawal since they are accepting crypto-currency. Every betting website should disable deposit option before KYC verification if really they need it. I am not fan of KYC especially any crypto related site. They can set withdrawal limit for unverified account like Binance, Bittrex. It's not really wise decision ask KYC only during withdrawal.     

I expect something different from them because this forum is one of their main advertising platforms, therefore they should follow what the community thinks appropriate, and i can only assume that the majority of us here disagree with how couldbet or any other gambling website go about this KYC b.s when they have to send money and not bother about it when receiving it.

i am not calling for a lawsuit against them, but rather a community stand-up against these unethical behaviors that come from cloudbet or any other gambling website that uses the forum to advertise their business which lack basic ethics.

just as the majority of the community came to appose account sales when it's not even against the forum rules, why not tag those who follow inappropriate business model?

Thats the exect reason i refused so often to provide KYC to exchanges who have no real office.
They ask to send your documents than my first question would be where is your HQ to be able to make claims against your company should my documents be in any form misused in the future and asking about their storing facility/security which is required by law to store customers sensitiv data.
I bet 10 BTC not a single of these online casinos has these kind of facility to be law conform about storing users sensible data.

But the main irony is as you mentioned already you are forced to provide full documentation to someone who hides himself.

You can't do anything about this unless you want to tag most casinos. This is a problem outside of the scope of the forum.

But this forum still advertise these casinos......

but we do tag account sellers , and i assume they are more in number than the casinos ? if we all agree that the casinos are performing unethical behavior that could even be considered scam or at least extortion - why shouldn't they be tagged?

technically, Cloudbet extorted documents from Swofty and refused to pay him the initial deposit until the extortion was finished.

it's really funny that Cloudbet now have a positive trust score after all that.

I think it's telling that they will ask for KYC once a withdrawal is requested, but not when a deposit is made.  If they were to ask for KYC upfront, I imagine they would have far fewer clients.  



This made me chuckle, if their ethics weren't dubious they likely wouldn't be in the casino business to begin with.  I'm sure most casinos are not likely to care if their clients adhere to the TOS if those clients keep losing money.  Once a client wants to claim a prize, that's when the TOS become tantamount to gospel.

I'm not trying to disparage casinos or their owners.  As long as they are operated as legitimate businesses and don't attempt to scam their clients, I believe they should have every right to exist.  I think it's great that the forum allows them as well.

So every time an exchange asks me for documents to withdraw, I'm being extorted? Keep in mind that you don't get asked anything for deposits/withdrawals under certain amounts (or unless something triggers alarms). I have issues following this logic.

There is definitely an ethical dilemma with accepting money no questions asked and only giving it back after seeing personal documents.  Imagine an escrow agent doing something like that.

I agree with you, but I don't doubt the reasoning behind casinos' request of documents for payout.  I'm an American so I'll put things into IRS terms:  If i can't prove that I paid $xxx.xx out, then I'm liable for taxes on $xxx.xx as income.  Proof is in the form of documents that require personal information about the payee.

What I would like to see is a very hard to ignore notification on the casino's membership initiation page informing their clients that KYC is not needed for using the site, but payouts greater than x amount require KYC.  I know it's probably buried in the fine print of the TOS, but making clear and unambiguous would greatly reduce these types of scam claims.  

most known exchanges, make things quite clear.

Take Binance for an example , they literally tell you that if you decide to withdrawal anything above 2BTC per day, you will need to provide a,b,c documents.

most other exchanges have a similar thing, and it's pretty different from what Cloudbet do, comparing these two completely different things is not very logical.


so if depositing 129BTC does not require any documents, why should withdrawing 50BTC require 2 months of on going investigations and the whole KYC drama ? notice that the player account was frozen after trying to withdrawal 50BTC




indeed, this is the least they should do. i did skim through their terms and conditions and i failed to see anything clearly stated at all.
  

I'll just drop this here to not repeat it again https://bitcointalk.org/index.php?topic=333552.msg49841819#msg49841819.

Why not asking documents then? What has changed between these withdrawals and why location all of sudden become important while it wasn't before?

Wrong. You are mixing up normal vs. irregular situations. Once you hit some random trigger, you may be asked for extra KYC even if you are fully verified already. The best you could ask for is that Casino's clarify in what cases KYC would be requested. Other than that I see this witch-hunt leading nowhere unless you want to go after every single exchange as well (some other services probably apply too) and in that case I wish you best-of luck.

This will suffice, and for obvious reasons, they will never do this unless they are somehow forced to it. and i think this is the main point of this topic.

and if the community does feel the need for such clarification regarding  KYC from casinos that use the forum to advertise their services, then i expect and old member like you to lead the battle  ;D

They don't do it exactly because there is no requirement for them to do it. I don't think I've seen a single site that has this laid out somewhere?

I'm sure you can fight your own battles, besides I won't side with either party because of all the usual leftist bullshit #bias, #abuse, #harassment, #thinkOfTheChildren, #FjShill.  :)

I am too old to lead such a battle  ;D, plus i lack experience and immunity against everything mentioned above. and based on my tiny tittle experience in this forum you seem to fit best for such task, after all the B.S against you, you still going strong, i am sure the KYC battle will be a piece of cake for you.



I am curious too, if you happen to get an answer from Cloudbet, please let me know !

They would have already answered it if they wanted to  :)

KYC verification at time of registration would solve such problems. But I don't think it's going to happen in crypto casinos, mainly because there aren't enough regulations in this market. People who use crypto casinos usually prefer to stay anonymous. And if one casinos would implement KYC at the time of registration, they would lose lot of potential customers. They would just move to another casino where they would be to game anonymously.
And gambling market is shady thing in general, no matter it's fiat or crypto. You can deposit large amount of money and lose it without any issues. But if you will win bigger amount of money - prepare for problems. Casino will start investigations to find that maybe you did break their TOS and prevent your from cashing out your winning. This case isn't exceptional, maybe only huge amount of money here is exceptional.

I get worn out defending myself against the bullshit that other DT members let slide; if this was happening right now, you'd probably not hear any input from me let alone see me lead the charge. Once I recharge again, maybe. But there is another problem (see last quote of this post).

We never really got any detailed information other than a little bit at the end.

The answer is simple, if they accepted his 129 BTC and bets without checking anything, then they have to pay out his balance.

If they checked his identity / location prior to accepting his 129 BTC and bets and he submitted manipulated documents, then the casino indeed has the right to confiscate the account balance.

However, the story could be indeed fabricated, because usually no one playing illegally deposits 129 BTC at once!

It’s been resolved, Swofty wasn’t who he said he was so Cloudbet were justified to ask questions. He was using somebody else’s ID. It was all a big mess but thankfully now it’s resolved.

there is no point stating the obvious, second line in the OP states that the issue has been resolved, this is not the purpose of the topic, it's a matter of whether the community thinks that it's okay to play the KYC game only after the player wins.

Personally, I think it looks very "scammy" when an online service is more than happy to take your money "no questions asked"... then does a "180" and starts asking for all sorts of verification as soon as you try to withdraw your money.

I understand the commercial downsides to a crypto-related business asking for KYC "upfront"... they'll be shooting themselves in the foot as users will just move on to the next service that doesn't require KYC to deposit (but may or may not play the card at withdrawal time). But at the very least, they should be "upfront" about the fact that it is likely you will need to provide KYC if you need to withdraw "large" sums (over some stated threshold). Surely it can't be that hard to include it in the T's&C's when a user is signing up?

I would likely have more respect for a service that was open and honest in this regard... rather than springing requirements on you at the last moment!

In any case, it probably won't stop users complaining... look at the large exchanges, they're generally pretty open about the fact that you will need to complete KYC to withdraw over a certain threshold... and users are always bitching about it. :-\

Hello,

Law student, and BTC crypto gambler here. I want to chime in and add some formal input to this discussion.

The following will be analysed;

1. Cloudbet.com's overall conduct and the reasoning behind their actions.
1. The ethicality of the KYC process that online gaming/casino companies initiate post-deposit.
2. The legal implications of engaging in potentially illicit business activities and potential remedies for affected Cloudbet.com consumers.

The logic and provisions will be taken from Commonwealth Law (vast and far-reaching). I am from a country that practices Commonwealth Law and I am able to access Cloudbet.com.
According to the website, Cloudbet.com is allowed to engage in commercial activity here, this means they have applicable licensing and are considered a commercial entity in this country.

Although simple and quite obvious, step 1 is to determine whether Cloudbet.com has a valid contract between the customer (user) and their business.
Four elements need to be satisfied; Offer and acceptance (agreement), consideration, intention to create legal relations, and certainty and completeness of terms.

Valid contract

• Offer made by Cloudbet.com to through its marketing, sign up process and more (both on and off-site).
• Clicking 'I agree/accept' after a list of standard terms on a website has been regarded as synonymous with the traditional signature; this is included in the sign-up form, thus, offer is accepted.
• The doctrine of consideration requires that something is given in return for a promise in order to make it legally binding. In this case, the end product is the potential winnings of the customer.
• Intention to create legal relations, the consumer and Cloudbet.com must have intended their agreement to be legally enforceable in order for it to be so - obviously satisfied.
• Certainty and Completeness of Terms. A binding contract must be sufficiently complete and sufficiently clear on its terms. I disagree with the language used within Cloudbet.com's T&C.
  An example: Cloudbet.com T&C - Bitcoin Funds (5.3.10)
  "We reserve the right to deduct any incurred costs for deposits from any amount of bitcoin that you withdraw if such costs exceed the net revenue generated by you from the date upon which you first deposit bitcoin with us".
  The term' net revenue' and 'incurred costs' would indicate that the consumer has now become a commercial entity. There are several other examples. However, personal interpretation of that line does not make that section in the T&C void, that's up to the judge. However, Cloudbet.com should consider further developing the language for their T&C, especially when courts will endeavour to attribute meaning to the language used by the parties, it's just good business. My claims can be rebutted, but I think it is necessary to highlight the ambiguity of derived meaning and uncertainties surrounding the language of Cloudbet.com's T&C.

Cloudbet.com's argument

The problem arises when faced with the argument Cloudbet.com is using - Customer violated T&C > Customer is no longer a valid customer > Contractual obligations by Cloudbet.com to the customer is no longer owed, as the customer is no longer a customer, and the contract does not exist. I.e. They are not obligated to pay out the customer as the promise is not contractual and therefore not enforceable.

Promissory Estoppel

However, the arrangement may still be enforceable in equity through the doctrine of promissory estoppel. The doctrine is designed to prevent unjust departure from promises relied upon by others to their detriment.

Relevant case - Legione v Hately(1983) 152 CLR 406

Elements of estoppel
1. The relying party has adopted an assumption;
2. The representor's conduct induced this assumption;
3. The relying party will suffer detriment in reliance on the assumption

There are also subpoints; the relying party's reliance must be reasonable; the representor's departure from the assumption they created must be unconscionable.

• The first element is satisfied due to the vast history of gambling/online gambling and the large player base that Cloudbet.com has (this is not a fancy new tech product or a perishable good).
• The second element is satisfied as Cloudbet.com heavily encourages consumers to make unlimited deposits through its platform and does not give adequate notice to customers regarding the KYC withdrawal process and payout barriers.
• The third element is also satisfied as the customer (Swofty for instance) suffers real-world monetary losses, due to the reliance on the payout assumption.
  

For the layman - Due to the reliance of the individual on the assumption that they will be paid out (GINALLI-ANTONIOO, Swofty, Kraac and more.) and Cloudbet.com's potentially unreasonable actions (court decides), they suffer a monetary loss. In the Commonwealth (which is vast and far-reaching), through precedent and statistics alone, it is unlikely that the court would favour Cloudbet.com's position - especially with high-value cases like Swofty.

Effect of an equitable estoppel:

Equitable estoppel raises an ‘equity’ in favour of the relying party i.e. an entitlement to equitable relief, which is determined at the court’s discretion (this could be more or less than the total balance of affected customers). Court determines the ‘minimum equity’ to remedy the loss suffered by the plaintiff i.e. the minimum necessary to prevent detriment being suffered by the relying party as a result of their reliance.

Cloudbet.com's unconscionable conduct
When reviewing all the short-term outcomes and general conduct (except for email etiquette between front-line support and customers as its influence is minor in comparison to other actions undertaken by Cloudbet.com)
the argument can be made that Cloudbet.com has used its commercial status and financial advantage as an abuse of power.

The doctrine of unconscionable conduct
1. The weaker party is under a special disability/disadvantage in comparison with the stronger party (disability/disadvantage)
2. The stronger party is aware of the special disability/disadvantage (awareness)
3. The stronger party took advantage of the weaker party’s special disability/disadvantage to obtain a benefit in circumstances where the transaction was not fair, just and reasonable (unconscientious advantage)

• Element one is satisfied, Cloudbet.com has the financial advantage.
• Cloudbet.com has demonstrated awareness of customers and their weaknesses through their actions.
• Cloudbet.com took advantage of the customers' disadvantage and proceeded with unreasonable actions.

KYC process and hidden barriers of withdrawal
Conversions are crucial to online businesses' success and bottom-line. Hence, this is why Cloudbet.com engages in heavy promotion and ensuring that the workflow (every-single button click, to the sign-up form, to language and more.) to a deposit is fast and straightforward.

Other FIAT based casino's that accept deposits usually employ 3D Secure. This is to prevent friendly fraudulent chargebacks (user loses $100, proceeds to claim he lost his card and the spending of $100 was actually committed by someone else. Financial institutions like banks have a history of siding with their customers) from occurring by verifying the user's identity through a linked mobile number SMS (2FA essentially).
Depositing with Cloudbet.com is entirely BTC/BCH only, this means that besides a formal KYC process, there is no way to pre-emptively prevent a US-based/*banned country*-based transaction through their system with the exception of GEO-locking IPs to allowed regions.

Cloudbet.com can argue that conversions are important and engaging in the KYC process pre-deposit can be harmful to their bottom line. It is. It will be. However, although Cloudbet.com does not exclude its terms of deposit/withdrawal, they do not provide or deliver adequate notices of such withdrawal barriers to customers/potential customers.

Incorporation of terms by notice
Whether terms are incorporated depends upon 2 things:
1. Were the displayed/delivered terms available to the party to be bound prior to the contract being made?
2. Were reasonable steps taken to bring the terms to the notice of the party to be bound? (party must have actual knowledge or notice of the terms)

An example is a prominent sign with terms displayed clearly at the entrance of a carpark. When a car enters the carpark with a receipt of the ticket, a contract is formed (refer to elements of contract formation above). A liability shift occurs between the customer (car owner) and the carpark (business). If your car is stolen or damaged and the carpark has provided due diligence, (security, camera's and fencing etc.) their liability is limited.

Cloudbet.com has failed to provide adequate notice, hence liability shift cannot occur.

I know this more than anyone. A customer/potential customer of Cloudbet.com will reasonably expect that to withdraw freely. This is especially relevant to new users who are entering online gambling for the first time and are not used to the mechanics of online gambling. Cloudbet.com may very well be their first interaction with online casino's/gambling. It is reasonable for a Cloudbet.com customer to expect an unhindered withdrawal, not unlike their unhindered deposit process.

The ethical dilemma

Example scenario:
You work at a large corporation that requires a criminal background check for all new customers, which takes approximately 24 hours from the time an order is placed.
You have the opportunity to close a lucrative deal with a potential long-term customer if you agree to ship the products overnight, even though that means the required check will have to be done after the fact.

This is very similar to the conflict between Cloudbet.com and customers. This kind of dilemmas and issues fall squarely in the domain of ethics. How would you handle the above situation? I urge Cloudbet employees/management reading this to try and answer this question internally.

Most ethical dilemmas involve a conflict between the needs of the part and the needs of the whole – the individual against the company or the company against society (all customers) as a whole.
For example, should Cloudbet.com install clear signage to notify customers of the KYC process and withdrawal barriers which may benefit customers as a whole but reduce the conversion rate?

Sometimes ethical decisions entail a conflict between two groups; should the potential for local health problems resulting from a company’s effluent take precedence over the jobs it creates as the town’s leading employer?

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There are a hundred more applicable statutes, torts and cases that can be applied to Cloudbet.com and their questionable management decisions.
I do not personally use Cloudbet.com, I haven't played on their website before. This is merely a study of unfortunate circumstances.

I hope this incites constructive discussion as unfair business practices by large corporations against consumers is an age-old tragedy.

Well the only reasonable step from the casinos is to tell when they will ask KYC, Sportsbet clearly states that it will ask KYC for any amount being larger than 0.10 BTC and if you read their term and conditions you have to abide by that or stop playing. Don't know Cloudbet terms and conditions but it is time we all start reading them before joining any casino to save ourselves the trouble of KYC later on.